National home prices increased an estimated 10.2 percent in 2013's first quarter, the first double-digit increase since the housing bubble's peak in 2006. / Gene J. Puskar / Associated Press

Written by

Hamlet Fort

The Tennessean

Nashville home prices grew 7.5 percent in the first quarter of 2013 compared with the first quarter of 2012, according to a new report from CoreLogic.

The residential property information provider tracked indexes in more than 380 U.S. markets. National home prices increased an estimated 10.2 percent in 2013’s first quarter, the first double-digit increase since the housing bubble’s peak in 2006.

Nashville’s increase represents a modest uptick compared with the leading market, which was San Jose, Calif., at 23.7 percent.

The analysis estimates that as home prices and mortgage interest rates increase and supply becomes balanced, price appreciation will slow in 2014. As the market stabilizes, inventories in existing and new homes should guide prices lower.

“Record levels of affordability, a slowly improving job market and very small inventories of new and existing homes for sale will continue to drive U.S. home price appreciation during the summer,” said David Stiff, chief economist for CoreLogic. “Although a small number of metropolitan areas show year-over-year declines, it is likely that home prices in these cities will turn positive by the end of the year.”

The analysis predicts Nashville’s 2014 first quarter growth year over year from 2013’s first quarter to be 1.2 percent.

The report also indicates that new housing construction is seeing more activity as home prices have added to developers’ profits. CoreLogic expects the pace of new construction to only increase as builders’ confidence continues to grow.

“Although double-digit gains usually indicate unsustainable appreciation and, possibly, bubbles in some metro areas, there is less need for concern now since home prices remain 26 percent below their peak nationally and are even lower in many metro markets,” Stiff said.